RealTime IT News

Canucks Cooperative on Hotspots

Canada's four major cellular carriers last month scored a North American first when they agreed to work out details on a Wi-Fi hotspot roaming arrangement that would let users of one company's hotspots easily use others' hotspots as well.

It wasn't quite a global first -- a group of mobile carriers in France announced a similar initiative a few weeks before. The Canadian effort is also some time away from bearing real fruit -- although the participants are vowing to have a detailed agreement in place by the end of the year.

Whether they meet that deadline or not, the deal has interesting implications. For one, it begs the question, why haven't carriers in the U.S. done this? It's hard to see how the initiative can have anything but a positive impact on the hotspot industry, certainly in Canada and possibly beyond.

"We think that if you get four carriers to agree to something that is simple for users and relatively uniform, it will make it easier for enterprise users to adopt Wi-Fi," says Peter Barnes, president and CEO of the Canadian Wireless Telecom Association (CWTA), the industry group that brought the four carriers together.

"The potential hesitations about using Wi-Fi in public places often have to do with security. If you have some name brand companies that get together and say, 'This is how we're going to do it,' I think that will help."

The four name-brand companies, which among them have over 12 million cellular subscribers, are:

  • Bell Canada, the highly diversified incumbent telco in Ontario and Quebec
  • Telus Mobility, the cellular subsidiary of Telus Corp., incumbent telco in the western provinces of British Columbia and Alberta
  • Rogers AT&T Wireless, a joint venture between AT&T Wireless and Rogers Communications Inc., a major Canadian cable TV provider, and
  • Microcell Telecom, which operates the GSM-based Fido cellular service and also provides wireless network services to regional cellular carriers.

All -- to varying degrees -- have mobile networks with national footprints. What's interesting, though, is that only one is directly involved at this point in the Wi-Fi hotspot market.

Bell Canada launched AccessZone as a pilot late last year. It's a still limited hotspot roll-out which the company has seemed in no hurry to accelerate. It currently has 20 fixed sites in hotels, airports and municipal buildings -- not many more than when it started.

Earlier this summer, though, Bell did take an innovative step when it launched AccessZone service on VIA Rail trains running between Toronto and Montreal.

Telus is a significant investor in Toronto-based Spotnik Mobile, which has over 60 sites, mostly in Toronto, all in Ontario, mainly in coffee shops and hotels. The company's Web site advertises another 70 or so sites "coming soon."

Rogers and Microcell so far have no involvement in the hotspot market. Does the fact that they are nevertheless party to this agreement mean they are now committed to entering the fray?

"All recognize the importance of this market," is all Barnes will say. "How they progress or enter the market will differ for each." He implies the other two may pursue an alliance model similar to Telus's.

Now that the initial agreement to work together has been forged with help from Barnes and the CWTA, the parties have gone off together to work out the details. The details include how users will log on at a hotspot in roaming mode, how they will be authenticated, how billing will be handled, how network operators will handle security -- a set of standards, in other words.

However, Barnes suggests it could ultimately go further than just standards. He talks about a chip level device or PC card that would automatically authenticate roaming customers.

"This could be the Interac model for the Wi-Fi world," Barnes says, referring to Interac Association, an alliance among Canadian and international banks and other entities that makes it possible for customers to use bank machines other than their own bank's.

"From the customer's perspective, they slide in a card for their laptop and that effectively acts like a bank card only for Wi-Fi access. It contains whatever PIN or password is needed to identify that the customer is associated with carrier A, B or Z -- and away they go."

"We think the whole secret is to make this as easy for customers as possible. Think of it -- if you had to have four bank cards, or one card and four passwords, bank machines would be a lot less popular than they are."

Some commentators in Canada suggested that announcing the agreement was a "pre-emptive strike" by the carriers to try and steal thunder from independent hotspot players who have a clear head start in the market.

However, Barnes insists there is nothing in the current agreement that precludes the group expanding in future to include both regional cellular carriers and specialty hotspot service providers. He stops short of saying that it's the intention of the current members to expand the group, but he believes this is what will happen.

"The way they look at it, this is an agreement to get together and work out a way to walk before they run, and it's just easier to do that with four players than with 30 or 40," Barnes says. "There are no walls around this."

The carriers may have a point about it being more difficult to get agreement in larger less homogenous groups. Still, if these four companies work out standards that other hotspot service providers in the future have no choice but to adopt, that certainly puts the carriers in the driver's seat in the Canadian hotspot market.

It may seem astonishing that even these four companies can work together -- especially such direct, often bitter rivals. They have done it before, though, working out another North American first: an agreement on text messaging that lets customers of different carriers exchange text messages, something they couldn't do before.

"What's being developed here is a culture of 'coopitition,'" Barnes says. "Yes, these people are competing every day, but they're adopting a different mind set. They're saying, we'll cooperate on these issues, but we'll continue to compete hard in the marketplace."

Barnes assumes the four Canadian carriers will look closely at what is happening in France. Orange (France Telecom's PCS arm), SFR and Bouygues Telecom announced earlier in the summer they were working on an agreement that will let customers of any one of them use hotspots owned by the others. The three have said they will later open the association to other hotspot operators.

"But I don't think there is any cookie-cutter versions of what we're trying to do," Barnes says. "There's a fair bit of start-up and original design work involved. We haven't seen anything out of the U.S. like this."

That may be the single biggest question posed by the Canadian initiative. Will it inspire the big national carriers in the U.S. to do something along the same lines? Or are their rivalries too intense to allow it?